Crystal Connection: November/December 2018

Don’t Let Employee Benefit Problems Derail Your Next Acquisition
Corporate acquirers must remember that evaluating pension and employee benefits plans requires specialized knowledge of regulations, actuarial data and the ever-changing state of the insurance market. Failure to have an expert in these areas on your due diligence team can lead to surprises that can scuttle a deal. Here’s what you need to know from Crystal & Company.

Extension of Due Date for Furnishing 2018 Forms 1095 B and C to Employees
The Department of the Treasury and the Internal Revenue Service is providing an automatic extension to employers, insurers and other providers of minimum essential coverage to furnish the 2017 Forms 1095-B and 1095-C to individuals. A 30-day extension is being provided, from January 31, 2019 to March 4, 2019.

HRA Changes Are On the Move, While HSA Bills Take a Back Seat
In the summer magazine of Crystal Connection, we reported on a number of bills that were introduced this year by the House of Representatives that aimed at expanding the use of health savings accounts (HSAs) and flexible spending accounts (FSAs). (We highlighted 9 bills with broad ambitions that include allowing consumers more flexibility in designing their HSAs and allowing spouses to make contributions to an HSA even if their spouse has an FSA. For additional details, you may want to refer to the Bills to Watch section of the magazine, page 17.)

So where are these bills now? They all were reported by the House Committee on Ways and Means in July 2018 with virtually no movement thereafter.

Interestingly, attention has shifted to health reimbursement arrangements (HRAs) instead. In fact, on October 23rd, various federal agencies set forth proposed rules to expand the use of HRAs, primarily by allowing the integration of HRAs with individual health insurance coverage and setting forth conditions under which HRAs would be recognized as limited excepted benefits. Specifically, the rules set out to:

1. Remove current prohibitions of integrating an HRA with an individual plan.

2. Provide assurance that the individual plan whose premiums are paid by an HRA or qualified small employer health reimbursement arrangement (QSEHRA) do not become part of an ERISA plan.

3. Expand the definition of limited excepted benefits so that certain HRAs are recognized as limited excepted benefits.

4. Expand the premium tax credit (PTC) eligibility to an individual who is offered, but opts out of, coverage under an HRA integrated with individual health insurance coverage.

5. Provide a special enrollment period in the individual market for individuals who gain access to an HRA integrated with individual health insurance coverage or who are provided a QSEHRA.

There is a commenting period in place until December 28th. We anticipate more developments during the first quarter of 2019 and will keep you informed.

IRS Announces Flexible Spending Account and Commuter Benefit Limits for 2019
The IRS has announced the inflation-adjusted limits for 2019 for flexible spending accounts (FSAs), adoption assistance and commuter benefit accounts. Health saving account (HAS) limits were released earlier this year. Please see the chart below for a 2018-2019 comparison of plan features. These and other inflation adjusted limits are set forth in IRS Rev. Proc. 2018-57.

Group Term Life Insurance Primer
Did you know that, under federal regulations, an employee may exclude the cost of up to $50,000 of employer-provided group term life insurance from income? Additionally, in some cases, employer-provided voluntary coverage is considered group term life and needs to be added to other coverage when calculating imputed income.